Watchdog: Government spending plans ‘not credible’

Good morning.

Establishing the Irish Fiscal Advisory Council (Ifac) in 2011 was a point of pride for many in Fine Gael, yet you wonder, in private at least, if some in the party now curse their own creation.

Ifac is doing exactly what Fine Gael intended it would and has become a credible watchdog on the public finances. Its criticisms of Government policy are elevated a level above the usual political charges made across the floor of the Dáil and cannot be easily dismissed, even if they are not acted upon.

The problem for Fine Gael is that the watchdog has repeatedly begun to bite its creator. In its latest report, Ifac, chaired by Séamus Coffey of UCC, has described the Government's medium-term spending plans as "not credible".

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The criticisms in the Fiscal Assessment Report tread over ground covered on a number of occasions by Coffey before. It is again argued the Government is overly reliant on corporation tax receipts to cover “unplanned” increases in spending, such as in health.

“The Government are ignoring their own advice and projections,” Coffey said. Asked on radio this morning if he is frustrated that his warnings are being ignored, Coffey said: “If politicians begin to hear some of this on the doorstep, maybe that will change.”

Many who canvassed for Fine Gael in the local and European elections reported that the party’s management of the public finances had indeed come up on the doorstep - especially in Dublin - in the wake of controversies over the cost of the national children’s hospital and the national broadband plan.

As Pat Leahy wrote in his weekend column, there is an awareness in Government that restoring Fine Gael's reputation for economic competence is one of the key tasks facing the party before the general election. The summer economic statement, due in a fortnight or so, is expected to detail the effect a no-deal Brexit would have on next year's budget.

Taoiseach Leo Varadkar and Minister for Finance Paschal Donohoe hope it will help steer political debate back onto the terrain on which they believe Fine Gael can win the election: Brexit and the economy.

For some time now, however, Ifac has offered a continuing critique of Donohoe's approach and cannot be waved away as criticisms from Fianna Fáil would. Our leader this morning says Ifac must be listened to.

Expect to hear Fianna Fáil, Sinn Féin the Labour Party and others today criticise the Government’s record of fiscal management.

How the Government responds to both the Opposition and to Ifac - with strong attacks on the former and reasoned argument with the latter expected - will offer an indication of how one of the key debates of the general election will develop.

Best reads

Fintan O'Toole says Michael Gove's use of cocaine 20 years ago may explain his attacks on the peace process.

From London, Denis Staunton reports on the Tory leadership race and says Gove's hard lines may help Boris Johnson into Downing Street.

In our lead story, Jennifer Bray reports that Paschal Donohoe will today tell the budgetary oversight committee that modest increases in property tax are planned for next year, while Paul McAuliffe, the new lord mayor of Dublin, says every party in Dublin City Council will form its own position on the issue.

At Cabinet today, changes are expected to rules on the allowable interest charged by credit unions and to the Fair Deal nursing home scheme.

Playbook

The Cabinet holds its weekly meeting today.

Dáil

Leaders’ Questions is at noon, followed by the Order of Business.

A motion on the approval of the terms of an agreement between the EU and Cuba will be taken without debate.

Taoiseach’s Questions is up next.

Minister for Housing Eoghan Murphy is on oral questions, and there will be statements on Northern Ireland.

The Qualifications and Quality Assurance (Education and Training) Amendment Bill 2018 [Seanad] is at second stage.

The Social Democrats have a PMB on the National Development Plan.

Seanad

The Judicial Appointments Commission Bill 2017 resumes committee stage in the Upper House.

The Gaming and Lotteries (Amendment) Bill 2019 is at report and final stages.

Committees

Focus Ireland is at the Children and Youth Affairs Committee to discuss the impact of homelessness on children.

Minister for Finance Paschal Donohoe is before the Budgetary Oversight Committee to discuss the recently published review of the Local Property Tax. The committee will also discuss the latest report of the Irish Fiscal Advisory Council with representatives of the council.

Communications, Climate Action and the Environment has a session on the financial implications of the Petroleum and Other Minerals (Amendment) (Climate Emergency Measures) Bill 2018 with Sean Canney, the Minister of State in the Department of Communications.

The Business, Enterprise and Innovation Committee scrutinises EU legislation and Clare Daly’s Industrial and Provident Societies (Amendment) Bill 2018.

Irish Language, the Gaeltacht and the Islands unveils a report on “The Challenges of Broadcasting”.